“Sandwich-Gate” Caps Another Year of Nationalization Woes in the UAE

UAE

Politics & Governance

Commentary

Sana Quadri

In early December, Twitter users in the United Arab Emirates erupted in fury over the continued inefficiency of the government’s attempts to boost domestic employment. This plan, usually referred to as “Emiratization,” intends to fill jobs currently staffed by foreign workers with Emirati citizens. This time, the row was prompted by a job asking Emirati citizens to apply for sandwich-making positions at the American fast-food chain Subway—a job that many Emiratis felt was beneath their educational, qualifications, or social status. That ad, now retracted, also came in the wake of a warning issued to private-sector companies by the Ministry of Human Resources and Emiratization (MoHRE), which required them to achieve an Emiratization target of 2% before January 1, 2023. This quota applies to companies with at least 50 employees and is only applicable to high-skilled jobs.

Emirati exasperation over rising unemployment and low-paying jobs has now reached a fever pitch. A Sharjah-based Emirati Twitter user with the handle @a9eelah tweeted that there were at least 17,000 unemployed Emirati citizens in Sharjah alone. Mira Al Hussein, an Emirati academic and a Non-Resident Fellow at Gulf International Forum, forewarned that the next Arab Spring could lead to even greater dependence on government welfare programs among many Gulf citizens, stunting their professional development. The Nafis program has now set a target of 10% Emiratization in the private sector by 2026,

A Crisis Spanning Generations

GCC states’ nationalization initiatives have been unraveling for a long time. Skewed labor markets, large demographic imbalances, and employer-driven open migration policies have rendered domestic employment programs ineffective. Yet, it is very difficult to imagine a situation—especially for a smaller state such as the UAE—wherein a surplus of citizen graduates struggle for employment in the public and private sectors.

In 2014, Gulf scholar Steffen Hertog analyzed the impact of nationalization policies across the Gulf over a period of two decades. Hertog posited that gaps in labor laws and lower wages for foreign workers remained the two primary factors impeding the participation of GCC citizens in the private sector. Hertog also believed that Gulf states with substantial oil wealth and smaller citizen populations, such as the UAE, would face far less challenges to integrate their nationals into the labor market.

Pragmatic Solutions Remain Elusive

The Twittersphere remains a crucial public square for Emirati citizens and foreign workers alike to discuss pressing social issues. Due to widespread self-censorship by netizens, having a meaningful and constructive policy debate is difficult. However, if there is one thing that has become clear from several generations of nationalization initiatives in the UAE, it is that policies that continue to reinforce the exclusivity of citizens in the labor market (thereby enshrining their status as a class unto themselves) will present obstacles to their employment in the long term.

When the host on a local Dubai radio station asked  an Emirati entrepreneur and consultant, if there was a way to resolve the current unemployment crisis without resorting to quotas and subsidies, he said that it solely depended on the willingness of the private sector to move beyond its perception of citizens as “hard to work with.” He further argued that businesses should hire citizens on the basis of their qualifications rather than their citizenship status. This way, firms will come to realize how Emiratis add value to their operations, and how they can contribute towards the Emiratization goal.

It is unlikely that this sentiment will effectively assuage the concerns private businesses have with hiring more Emiratis. If the UAE wants to remain attractive to foreign investors and businesses, the onus is on citizens to demonstrate their value to company profits. Nationalization as a goal in itself will not hold the same appeal to private companies. More so as businesses are gearing up to cut business costs in light of the 9% corporate tax starting in the summer 2023 . Policymakers should also recognize that Emiratis constitute roughly 10% of the population in the UAE; not only does this signify a highly segmented labor market, but also a very economically segmented society. Therefore, by virtue of being a citizen alone does not necessarily give Emiratis a competitive edge over other skilled immigrant workers, in terms of local business intelligence and social skills. Finding ways to tightening the open migration regime is perhaps a better way forward. Especially the recent announcement of the ‘job seeker visa’ is not a wise move in a climate already defined by high citizen unemployment and dissatisfaction with nationalization schemes.

Though market pressures are at the heart of the Emiratization conundrum in the UAE, achieving a long-term solution remains a purely political enterprise. Over the past decade, the unemployment crisis has been aggravated by structural changes in the UAE’s economy, including a general transition away from oil and the near-abolition of the kafala labor sponsorship system that also served as a crucial source of rentier income for Emiratis. As the social contract undergoes rapid changes year on year, the logical next step would be to articulate some basic political concessions and transparency in policy making. The creation of a generous welfare state fueled by oil wealth did not come about without sacrifices from ordinary Emirati citizens; it saw an erosion of their cultural identity and made them a minority in their own country. Emiratis have now arrived at a similar crossroads, where they are being asked to make some concessions for the good of the nation. This time, however, they cannot afford to be passive observers.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of Gulf International Forum.